Pensions Production Theory

The theory of old age security demand transformation is based on bothhistoric and realistic analyses. The individuals demand fOr care in old age isdetermined by the biological and social nature of human beings. Family careis the original and basic means of transformation for meeting the demand forthe care of the individua1 in old age while social demand for old age care is atransformation from individual demand. These transformations are closelyrelated to social development and affected by many factors. The principlefactors include the social division of labor and industrialization. Since thesocial demand for care during old age is objective and realistic, the total costof old age care is accountab1e. As there are basic differences betWeen thetheory of demand transformation and other schools of thought on pensioning,an analysis of the pension systems of some tyPical countries can be used toprove the theory of demand transformation of care during old age.This paPer is a discussion of the development of pension systems andpension products using an analysis of the process of establishing a pensionsystem. The theories on establishing a modem pension system have helpedto gUide the establishment of pension systems and exerted significantinfluence on the formation of such pension systems. This essay has definedand analyzed the understanding of pension products as quasi-public goods.The essay also includes research and summaries of different tyPes of pensionproducts and draws conclusions about the basic tyPes. By researching thepublic reserve funds of SingaPore and the personal savings account pensionsystems in Chile, the essay has clarified the special natue and variousmodes of pension products.Based on an analysis of the suPply and demand for pensions, thisessay puts forward some measures to manage the balance between supplyand demand. As there is a specified connotation for pension demand,monetary means is always adopted to calculate the demand. The essay triesto use the idea of "utility credit" to estimate and comPare the satisfaction ofpension demand. Since there are some special characteristics relating topension supply different countries adopt different means to satisfy thedemands. The main three suppliers in most countries are govemmentagencies, employers and employees. In addition to the basic two methods -- apay-as-you-go and a pension fund system -- there is also a mixed pensionsystem. Solutions to problems are offered after an analysis of the factorswhich affect the balance of pension funds, a prediction on the trend of futurepension models is provided after illustrating the evolution and operation ofthe old models and flnally there is a discussion on the aPplicability of life3cycle theory and the closing generation theory of pension funds.Pension production and stability depend on support from outside thepension system. First of all, pension funds need legal support. This essaydiscusses the socia1 functions of pension lmp with a focus on the scope oflegal coordination and the principles of pension funds legislation. Then theessny discusses a number of models and how they manage and allocate thepension funds. Lastly it analyses the aPplication of Information Technologyto the field of pension production.The management of a pension fund will affect its sustainabledevelopment. The essay summarizes the public management of pensionfunds, but primarily focuses on investmeni management. The essay alsoincludes a systematic discussion about the nature of pension funds and theprinciPles, institutions and roules which can be used to invest. In the end, itdelves further into the risks of investing in pension funds from a modempoint of view and discusses the possibility of using invesrment theory in reallire.RegUlation is another precondition to the managemeflt of pensionfunds and regUlation theory is at the same time related to economicdevelopment. Th...